While President Obama took aim at China during his state of the union address this week, Apple was on its way in after-hours trading to becoming the most valuable company in the world– adding over $20 billion to their total stock market value. This rise was driven by another amazing quarter of iPhone and iPad sales.
Apple is considered an “American company,” but the score on Tuesday evening was China 1, Obama 0. Apple, like many consumer electronics firms, has outsourced most of their manufacturing work to China.
The President stated, “I will not stand by when our competitors don’t play by the rules…. Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China.” He also asserted that “Our workers are the most productive on Earth, and if the playing field is level, I promise you -– America will always win.”
But when it comes to jobs, the playing field is far from level, and most of what’s unleveling it has little to do with what the President considers unfair trade practices.
An article this week in the New York Times and a recent “This American Life” radio piece both provide details about life at one of Apple’s primary manufacturing partners – Foxconn. By American work standards, the conditions are awful. The Times reports routine 12 hour day 6 day weeks with few breaks, and wages of less than $2 per hour. The worker safety rules, protection of worker’s basic rights, and input into conditions that we typically take for granted seem to be an after thought.
In the This American Life Piece, Mike Daisy claims to have seen workers as young as 12 at the gates of the Shenzen facility, and interviewed several workers fired after crippling repetitive motion related injuries made them unable to work. Environmental regulations are considered to be equally lax.
As was quoted in the Times piece, a former apple executive admitted that ”most people would still be really disturbed if they saw where their iPhone comes from.”
Many respected economists, including Paul Krugman, assert that these jobs still represent a significant improvement in prospects and a path out of poverty for those lucky enough to land them. Others point out that workers in the US would probably not want them – especially given the working conditions and pay.
So the central question is really whether we are willing to accept lower standards for products produced outside of our country than those produced at home?
Isn’t this an unfair trading practice? What exactly does an even playing field really mean?
In response to the criticism of the conditions under which Apple products are made, Apple is vowing to add transparency and more carefully audit the conditions of their sub-contractors to meet their code of conduct. But given the type of work done in China, and the radical wage difference, don’t expect these jobs to come back to the US anytime soon….unless consumers are willing to give up buying iPhones and iPads as a way of voting with their pocket book.
That doesn’t seem likely.
Photo: Official White House Photo by Pete Souza